“Fitch believes that the Turkish economy is on track to return to a sustainable growth rate, having narrowed the current account deficit and lowered inflation after overheating in 2011,” according to Fitch analysts.

“Turkey’s achievement of this credit rating is expected to mark the start of a new era in the access of our public and private sector institutions to international capital markets,” Deputy Prime Minister Ali Babacan said in a statement.

“It’s important to know that credit markets have been trading Turkey like an investment grade credit for some time,” Manik Narain, emerging markets strategist at UBS, said in the article. “But at the end of the day this will create actual investment inflows and lower borrowing costs even though it was partially priced in.”

After the Fitch announcement, bond traders pushed yields on the two-year benchmark Turkish bonds down to 6.89% on Tuesday, the lowest since 2005 on bets that the central bank would have more leeway to lower interest rates, reports Selcuk Gokoluk for Bloomberg.

Countries require investment grade ratings from two of the big three ratings agencies to be included in most benchmark investment grade bond indices. Moody’s has kept Turkey one notch below investment grade and S&P holds turkey two levels below.

Nordea Bank economist Aurelija Augulyte expects Moody’s and S&P to upgrade Turkey. “I think that this will happen for sure,” Augulyte said in a Daily News article.

“Both of the other rating agencies could potentially deliver one notch upgrades with the next 12 months,” JP Morgan Chase economist Yarkin Cebeci said in the Reuters article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.